Manage episode 303933486 series 2910154
Did you know that your investments cost money? Those mutual funds, ETFs, brokerage accounts, etc - are not free, despite the marketing. It takes people and companies to produce those products, so you better believe you are paying for them somehow. It pays to understand the costs.
The biggest one I want to cover today is called the “Expense Ratio” for a mutual fund or ETF because this is a yearly fee deducted from your investments. For any fund that you own, you can quickly look up the expense ratio which will be somewhere between 0% and 2%. If all your funds are in that 0-.2% range, you are doing well.
There are legacy funds that charge up to 1% or 2% but invest in the same universe of stocks as funds costing just .1% ! Do a quick checkup to confirm you aren’t in one of those.
Tune in to hear:
- Why do funds have different fees?
- When might it be OK to invest in a fund with a higher expense ratio?
- What other fees are beyond the expense ratio.